Decoding 8 Types of Commercial Real Estate Assets Part 2
This post is part two of a series covering the types of commercial real estate. If you missed part one, you can click here to learn about retail, multifamily, office, and industrial real estate.
4 More Types of Commercial Real Estate Assets
Hospitality Real Estate
Hospitality is a commercial sector with properties offering services like accommodations to travelers. Hotels and motels are common properties in hospitality, which also include luxury resorts, small inns, or bed & breakfast properties. These properties cater to travelers, tourists, and individuals seeking accommodation for leisure or business purposes. Hospitality properties can be particularly lucrative in tourist destinations. However, they may also be subject to seasonal fluctuations in revenue. Some people may also classify conference centers and entertainment spaces as hospitality properties.
Mixed-Use Real Estate
Mixed-use properties blend different commercial sectors. For example, a property could have both residential and retail space. You might find hotels with retail stores on one floor. Some office parks have warehouse space along with office units. You might also find other combinations with two or more sectors on the same property. The general idea with mixed-use properties is to offer convenience while the commercial sectors provide mutual benefits to each other.
Commercial Land
This category covers undeveloped commercial land. It is one of the riskiest options in commercial real estate but can offer high returns. Commercial land could cover everything from raw land to once-developed but now vacant properties. Generally, commercial land requires the investor to buy and develop the property for profit. Factors like location, zoning regulations, accessibility to utilities, and market demand influence the value of commercial land.
Special Purpose Properties
Special-purpose properties don’t fit neatly in any of the above categories. Some might fit on the edges of other categories, but they are unique in meaningful ways. With special-purpose real estate, you’re looking at properties with specific purposes. Hospitals, golf courses, amusement parks, churches, and power plants are examples of special-purpose properties. The design of these properties is specific to the purpose, and you can’t quickly adapt it to other uses. As such, valuations can be challenging.
Now that you know about eight types of commercial real estate assets, there is still much more to know before investing. Working with local experts, such as real estate agents, attorneys, and property managers, can make your investments successful.
